Indonesia: The Technology, Media And Telecommunications Review, Sixth Edition - Indonesia

Last Updated: 9 June 2016
Article by Agus Ahadi Deradjat and Kevin Omar Sidharta

I  OVERVIEW

Infrastructure development, including the development of telecommunications infrastructure, is imbalanced among the islands of Indonesia. A key challenge is the need to reach an extended archipelago of over 17,500 islands. Nevertheless, since 2013, the Ministry of Communication and Information Technology (MCIT) has sought to bolster infrastructure development through Regulation of MCIT No. 3 of 2013, complementing Regulation of MCIT No. 32/PER/M.KOMINFO/10/2008 as amended by Regulation of MCIT No. 03/PER/M.KOMINFO/02/2010 concerning Telecommunication Universal Service Obligation (USO), which provides for the expansion of telecommunication services coverage in Indonesia. The expansion principally targets remote or underdeveloped areas, including commercially underdeveloped areas and areas that have not been covered by the existing telecommunication services coverage. On 30 June 2015, in order to eliminate the risk of administrative and technical difficulties that were encountered during the implementation of the USO programme under the above-mentioned regulations, MCIT decided to revoke and replace these regulations with Regulation of MCIT No. 25 of 2015 concerning Implementation of Telecommunication and Information Technology USO.

To combat social issues arising from Indonesia's rapid population growth, the government established Law No. 11 of 2008 on Electronic Information and Transactions as the basic principle to regulate privacy and e-commerce in Indonesia. However, effective implementation of the Law remains a key challenge for MCIT.

II  REGULATION

i The regulators

MCIT governs and supervises the Indonesian technology, media and telecommunication sectors as the representative of the government of Indonesia. MCIT is the primary regulatory body, responsible for licensing and administration of the TMT sectors. Nevertheless, due to the complex nature of the technology sector, the Ministry of Industry also has the authority to administer, regulate and supervise matters relating to technological appliances and tools, with the exception of telecommunication devices.

To assist the administration of the telecommunication sector, MCIT has also established the Indonesian Telecommunication Regulatory Body (BRTI). MCIT specifically delegates its authority to regulate, supervise and control the provision of telecommunication network and services to BRTI, while maintaining the authority to formulate policies, regulate, supervise and control other fields of the telecommunication sector. MCIT is further supported by the Indonesian Broadcasting Commission (KPI), which is an independent state institution established under the Broadcasting Law (see below). An important role of the KPI's involvement is to manifest public participation in the broadcasting area.

The key laws regulating Indonesia's TMT sector include:

  1. Law No. 36 of 1999 on Telecommunication (Telco Law);
  2. Law No. 40 of 1999 on Press;
  3. Law No. 32 of 2002 on Broadcasting (Broadcasting Law); and
  4. Law No. 11 of 2008 on Electronic Information and Transaction (EIT Law).

ii Regulated activities

Generally, the regulation of Indonesia's telecommunication sector is divided into sectors. The telecommunications licensing regime is divided into three categories for the provision of telecommunication networks, telecommunication services and special telecommunication. The provision of a telecommunication network that requires radio frequency spectrum allocation or a network access code is limited. With the exception of special telecommunications, the provision of telecommunication networks and services requires a principle licence, followed by an operational licence. The principle licence is a non-transferable licence granted for a maximum period of three years for those telecommunication network licences where providers are limited; two years for those telecommunication network licences where providers are not limited; and one year for telecommunication service licences. All providers have the option to extend their licence once for either one year for telecommunication network licences whose providers are limited; or six months for both telecommunication network licences whose providers are not limited and for telecommunication service licences. The principle licence is issued by MCIT not later than 14 calendar days after receiving a completed application. If MCIT does not issue any decision to either approve or reject the application within such time frame, the application will be deemed as approved by the MCIT. The holder of a principle licence may begin to prepare the necessary infrastructure and facilities for operation. Once ready to commence operations, the principle licence holder shall conduct a operational feasibility test in order to obtain an operational feasibility certificate from MCIT, and may apply for an operational licence. The operational licence is granted by MCIT for an indefinite period, but is subject to evaluation by the either the director general of MCIT or MCIT once every five years for basic telephony services, value added telephony services and multimedia services, and once every six years for the telecommunication network. For the provision of special telecommunications, no principle licence is required if the provision is for personal use or relates to a special duty. Neither a principle licence nor an operational licence is required if the provision is for the state's defence and security.

In the media sector, pursuant to the Broadcasting Law, broadcasting institutions must obtain broadcasting operation licences prior to conducting broadcasting activities. Applications to obtain broadcasting operation licences must be submitted to MCIT through the KPI. MCIT then issues a decision to approve or reject the application. The broadcasting operational licence takes at least 100 working days to process as of the date the completed application is submitted. The validity period of the broadcasting operational licence is five years for a radio broadcasting operational licence and 10 years for a television broadcasting operational licence.

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Previously published by Law Business Research

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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